Euro zone sentiment dips in October but remains positive

Reuters Staff

2 Min Read

BERLIN, Oct 7 (Reuters) - Euro zone sentiment fell in October after surging to its second strongest level ever in September but it remained in positive territory for a second consecutive month, a survey showed on Monday.

Sentix research group said its index tracking investor morale in the euro zone dropped to 6.1 points from 6.5 points in September. The reading fell well short of the consensus estimate in a Reuters poll for 8.0 points.

In September the index turned positive for the first time in more than two years and saw its second strongest rise since being introduced in 2003.

“After that record-breaking leap, there was a small drop of 0.4 points in October and that should be interpreted as stabilisation at a level that is now healthy again,” Sentix said in a statement.

“That means annual gross domestic product (GDP) growth in the euro zone probably normalised in the current quarter because if the overall index has a value of zero, it means that optimism and pessimism about the economy are in balance.”

The 17-country euro zone emerged from its longest-ever recession in the second quarter, expanding by 0.3 percent. It is expected to grow by around 0.2-0.3 percent per quarter through to the end of next year.

Sentix said the 907 investors it surveyed between Oct. 2 and 5 were the most upbeat about the current situation since the same month two years ago, with a sub-index on this rising to -8.5 from -8.8 last month.

But they became more pessimistic about the future. A sub-index tracking expectations fell to 21.8 from 23.0 in September.

The index on the United States, the world’s largest economy, fell significantly due to the government shutdown caused by a standoff between President Barack Obama and congressional Republicans over healthcare reforms.